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OMV expands Exploration and Production portfolio with major investment in Tunisia

January 6, 2011 - 10:30 am (CET)

  • OMV acquires Tunisian Exploration and Production (E&P) subsidiaries of Pioneer Natural Resources for USD 800 mn plus working capital
  • Transaction adds immediate production and significant exploration and development upside
  • Substantial operational synergy potential given adjacency to OMV’s existing Tunisian assets
  • Acquisition in line with the corporate strategy to pursue bolt-on acquisitions in E&P to enable future growth

Today, OMV, the leading energy Group in the European growth belt, through its fully owned subsidiary OMV (Tunesien) Production GmbH, signed an agreement to purchase 100% of the issued share capital of Pioneer Natural Resources Tunisia Ltd. and Pioneer Natural Resources Anaguid Ltd. (together "Pioneer Tunisia") from Pioneer Natural Resources, an independent US oil and gas company, for a purchase price of USD 800 mn plus working capital of Pioneer Tunisia. The working capital amounts to USD 65.7 mn and will be adjusted as of closing based on the 2010 audited financial statements as well as any dividend distributions to and capital contributions from the seller following December 31, 2010. Closing of the transaction is expected in Q1/11.

Jaap Huijskes, OMV Executive Board member, responsible for E&P, stated: "I am delighted to announce this acquisition of Pioneer’s Tunisian subsidiaries, as a result of which OMV will substantially increase its production and reserves base in Tunisia, thus ensuring a sustainable business in the years to come. OMV is fully committed to unlocking the hydrocarbon resource potential in southern Tunisia together with its partners and to supplying gas to the domestic market. The acquisition is in line with the company’s strategy to achieve synergy effects with existing OMV assets and to pursue bolt-on acquisitions in E&P to enable future growth."

The transaction will significantly strengthen OMV’s position in Tunisia, an important country in the E&P core region North Africa. OMV will acquire immediate production of approximately 5,700 boe/d (average net production in Q4/10), 90% is attributable to oil and 10% to gas. Based on a report by DeGolyer MacNaughton of June 2010, Pioneer Tunisia’s acreage holds 2P reserves of 38 mn boe and 3P reserves of 59 mn boe. The acreage offers considerable exploration upside and will complement OMV’s existing south Tunisian assets, Jenein Sud and Nawara, very well. From a strategic point of view, OMV will be able to unlock substantial synergy potential in field operational activities. Furthermore, Pioneer Tunisia and OMV are both partners in the South Tunisia Gas Project (STGP) which aims to build a 320 km gas pipeline from the Adam production concession to the city of Gabes by 2014 to supply the Tunisian domestic market with gas. With the now reached consolidated partnership structure, the decision making process for the STGP will be facilitated.

The transaction consideration will be initially funded with existing cash and committed credit lines. OMV remains committed to strict capital discipline and retains the clear objective of maintaining a strong investment grade credit rating.

Pioneer Tunisia’s interest in the Anaguid exploration permit and in the Mona/Durra production concession is subject to a pre-emption right of Pioneer Tunisia’s partner under the respective Joint Operating Agreement. Anaguid and Durra/Mona account for 13% of the purchase price. In case the pre-emption right is exercised and Pioneer Tunisia’s partner acquires the shares in Pioneer Natural Resources Anaguid Ltd., the purchase price will be adjusted accordingly.

Balanced international E&P portfolio
OMV holds a balanced international E&P portfolio in 17 countries structured around six core regions, namely CEE, North Africa, Northwestern Europe, the Middle East, Australia/New Zealand and the Caspian region. OMV's daily production in 9m/10 is approximately 317,000 boe/d and the Company’s proven reserves at the end of 2009 were approximately 1.19 bn boe.

Background information:

Pioneer Tunisia
Pioneer Tunisia holds interests in three production concessions and four exploration permits in southern Tunisia:

Production concessions
Jenein Nord-Cherouq, 50 % (operator)
Mona/Durra, 30% (operator)
Adam, 20%

Exploration permits
Jenein Nord, 100% (operator)
Anaguid, 60% (operator)
El Hamra, 100% (operator)
Borj-El-Khadra, 40%

OMV in Tunisia
OMV first became active in Tunisia, part of the core region North Africa, in the early 1970s. The acquisition of the international E&P activities of Preussag in 2003 gave OMV access to several oil fields in the Gulf of Gabes, both onshore and offshore. The most prolific of these is the offshore Ashtart field. In 2009, OMV was awarded the Nawara production concession which was carved out from the Jenein Sud exploration permit. Production from the Nawara concession will be fed into the STGP pipeline. OMV currently has interests in two exploration and six production licenses in Tunisia. The production in Tunisia amounted to approximately 7,000 boe/d in 9m/10.

OMV Aktiengesellschaft
With Group sales of EUR 17.92 bn and a workforce of 34,676 employees in 2009, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. As the leading energy Group in the European growth belt, OMV is active in Refining & Marketing (R&M) in 12 countries. In Exploration & Production (E&P) OMV is active in 17 countries on four continents. In Gas & Power (G&P) OMV sells approximately 13 bcm gas per year. Through its 2,000 km long gas pipeline network in Austria G&P transports approximately 75 bcm gas annually. OMV’s Central European Gas Hub is with around 23 bcm annual trading volume one of the most important gas hubs in Continental Europe.

OMV is the leading energy Group in the European growth belt with oil and gas reserves of approximately 1.19 bn boe, daily production of around 316,000 boe in Q3/10 and an annual refining capacity of approximately 26 mn t. OMV now has 2,310 filling stations as of Q3/10. The market share of the group in the R&M business segment in the Danube Region is now 20%.

OMV further strengthened its leading position in the European growth belt through the acquisition of a stake in Petrol Ofisi, Turkey’s leading company in the retail and commercial business.

Under its 3plus strategy, OMV combines the strengths of its E&P, G&P and R&M business units in order to ensure that it provides the best possible supply service to its three core markets of Central and Eastern Europe, Southeast Europe and Turkey. OMV uses the synergies that result from the combination of these strengths to extend its supply chain from oil and gas through to electricity and eventually renewable energy.

Sustainability
OMV is a signatory to the UN Global Compact, and an active supporter to the values enshrined in its Code of Conduct. These include a strong sense of responsibility towards the social and natural environment, especially in economically weak regions. OMV continuously addresses economic, environmental and social issues related to its business in a responsible manner. The Company reports on its activities in a sustainability report in accordance with the Global Reporting Initiative Guidelines. This report is published at the same time as the annual report.

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